Which of the Following Ratios Provides a Solvency Measure That

question 49

Multiple Choice

Which of the following ratios provides a solvency measure that shows the margin of safety of bondholders and also gives an indication of the potential ability of the business to borrow additional funds on a long-term basis?

• A) ratio of fixed assets to long-term liabilities
• B) ratio of net sales to assets
• C) number of days' sales in receivables
• D) rate earned on stockholders' equity

---

Definitions:

Implementation Activities

Actions taken to put a plan or strategy into effect, ensuring that the intended goals are achieved.

Marketing Objectives

Specific goals set by a business when promoting its products or services to potential consumers that should be achieved within a given time frame.

Opportunity

A favorable situation or condition that offers the prospect of a benefit, advantage, or solution to a problem.

SWOT Analysis

A strategic planning tool that identifies Strengths, Weaknesses, Opportunities, and Threats related to business competition or project planning.